Philips set-top box U.S. deal seen as major step
TUESDAY, AUGUST 15, 2000 7:56 AM
- Reuters
AMSTERDAM, Aug 15 (Reuters) - Philips Electronics' (NYSE:PHG)
deal to sell a million digital set-top boxes to AT&T Corp (NYSE:T) is a
major step in its push into the U.S. market, analysts said on
Tuesday.
Europe's largest maker of consumer products, lighting and
semiconductors, said late on Monday it had signed an initial
agreement with AT&T Broadband to form a new business alliance.
AT&T will begin supplying its U.S. consumers with Philips' boxes in
2001 with an initial volume set at one million units.
Philips, one of the world's top three set-top box producers and joint
leader in Europe with Thomson Multimedia (NYSE:TMM), previously
decided to develop its market in the United States from scratch rather
than buy a U.S. maker. It is believed to have looked into purchasing
General Instruments, the U.S. maker that Motorola (NYSE:MOT)
ended up acquiring.
Analysts said the deal announced on Monday was a demonstration of
the success of such a strategy and suggested Philips may be eating
into the market dominance of Motorola and Scientific America
(NYSE:SFA).
Neither company has said how much the deal is worth.
"It's a terrific order, firstly in terms of size," said Wouter de Ridder,
analyst at Kempen and Co.
"The fact that it's a sale to a U.S.-based company is significant... It
could be a signal to other customers," said Marc Kennis, analyst at
Van Lanschot Bankiers.
By 1124 GMT, Philips shares, also buoyed by a rally of
semiconductor stocks in the United States, were up 2.2 percent at
50.40 euros. The shares are 8.3 percent higher this week and 49
percent in the year-to-date.
Philips is steadily increasing its output and range of digital consumer
products, ranging from DVD players, television sets and a variety of
new audio players.
Rtr 07:56 08-15-00 Copyright 2000, Reuters News Service |
